Is the Sirius share price running out of steam?


Is the Sirius share price running out of steam?


Published Date: 2021-10-07 | Source: INCE|Community | Author: The Finance Ghost

Is the Sirius share price running out of steam?

Sirius is a property fund that owns and operates business and industrial parks in Germany. The market adores this company, having driven the share price to a level that reflects a massive premium to book value.

The argument is that Sirius actively manages the properties and increases their value, so today's book value doesn't reflect what they are really worth. That's great, but if you're paying a premium to book, then isn't that priced in?

Anyway, let's focus on the SENS announcement which gives a trading update for the six months to September 2021.

The rent roll increased by 2.5% to EUR98.9 million. The annualised rent roll (i.e. based on tenant in place today) is 3.3% higher than it was at March 2021. Total occupancy sits at 85%.

Sirius highlights that it completed a EUR400 million oversubscribed corporate bond issuance in June, with a cost of funding of 1.125% until June 2026. This enabled the repayment of EUR170.7 million in secured debt and drove a reduction in the weighted average cost of debt to 1.2% from 1.5% at March 2021. The weighted average term of debt also increased from 2.7 years to 3.7 years, which is positive.

The fund is still buying up land and buildings in Germany at pace, with EUR153.9 million in deals over the period.

The loan-to-value is 38.3% which is in line with many of the property funds in the market.

The detailed interim results will be released on 8th November. The share price closed over 4% lower yesterday based on this update - could it finally be running out of steam?


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